If the debt ceiling had not been lifted and then the stock market had plunged 700 points, administration statists and mainstream commentators would have been screaming, “The stock market has plunged because the debt ceiling wasn’t lifted!”

But the debt ceiling was lifted and extended to sometime past the 2012 presidential election. Congress permitted President Obama to add another $2.7 trillion to the national debt within the next two years.

Then what happened? The stock market plunged 700 points!

So, what did the statists say about that? They’re telling us it’s all because of the debt crisis in Europe or loss of consumer confidence and has nothing to do with the lifting of the debt ceiling and the mountain of new federal debt.

Leave it to the statists to provide some comedy in times of “crisis.”

Of course, it’s always difficult to know the reasons for daily swings in the stock market, but I’ve got another possible explanation for the stock-market plunge: America’s welfare-warfare state is cracking apart, just like Europe’s welfare state is cracking apart, and that’s what people are losing confidence in.

And even if it’s not this time, it is just a matter of time. Look at Europe. They’ve been bragging about their social safety net way of life for decades. Early retirement. Free education. Free health care. And plenty of rich people to tax to fund it all.

But over time, the system started to cave in on itself. The number of people on the dole continued to expand. The number of rich began to shrink. The government couldn’t cut the dole to match the tax revenues because that would make the dole recipients upset. And confiscating everything from the rich would leave nothing to loot the next year.

So, such governments as Portugal, Italy, Greece, and Spain (the PIGS) just went out and borrowed the difference. And kept borrowing and borrowing and borrowing. And spending and spending and spending. And now, finally, they’ve hit the day of reckoning. They’re busted, broke, bankrupt. And pleading for other governments to give them money.

Why would it be any different with the United States? We’ve had a welfare state since the time of Franklin Roosevelt. That’s when the crown jewel of the welfare state — Social Security — came into existence. That’s when the primary purpose of the federal government became taking money by force from those who have it in order to give it to others.

Ever since, libertarians have warned that ultimately this immoral way of life would end in disaster. After all, the welfare state is based on socialism, an inherently defective paradigm. Throughout it all, however, statists have argued, “Don’t listen to the libertarians. As long as we say that our socialist programs are ‘saving free enterprise,’ everything will be hunky-dory. Anyway, it’s not as if it’s the Soviets or Cubans running our socialist programs. It’s Americans!”

Are libertarians the only ones who remember how Ronald Reagan supposedly brought down the Soviet Union? He made it spend its way into bankruptcy! I’ve got a discomforting question for statists: Why wouldn’t the same principle apply to other countries, including our own?

Then came the Cold War warfare state, which involved ever-growing military expenditures. Thousands of domestic military bases. Thousands of foreign military bases. Invasions, occupations, sanctions, embargoes, foreign aid, and regime-change operations, especially to dictatorial regimes.

The statists would say, “Don’t worry. Everything is fine. There are plenty of rich people that we can take the money from to pay for it all.”

But it was not all fine, as we are discovering. The number of people on the dole-receiving end has now exploded into public view, with no end in sight. The military dole recipients are fighting viciously to maintain their dole, perhaps even more viciously than the Social Security and Medicare dole recipients. And then consider the people who are dependent on food stamps, education grants, community grants, corporate subsidies, and on and on.

As expenditures have exploded, both on the welfare side and the warfare side, the feds have resorted to borrowing — just like the Europeans have. Each year they’ve just kept borrowing and borrowing and borrowing … and spending and spending and spending.

And there’s no end in sight. With the lifting of the debt ceiling, Congress has just permitted President Obama to add another $2.7 trillion to the national debt. When the next debt ceiling is reached in 2013, we’ll go through this whole charade again. In other words, there will be no effort to do what is necessary to eliminate the need for adding new debt two years from now.

Statists are undoubtedly sad over the plight of their beloved welfare-warfare state. But what do they prescribe? More spending, more debt, more taxes, and more inflation.

That’s just plain sick.

I’m not sad that the welfare-warfare state might be coming apart. I’d be sad if the whole socialist-imperialist system had worked. It goes to show that God has created a consistent universe, one in which immoral means beget bad ends.

Hopefully, as things get worse, more and more people will continue gravitating toward us libertarians and joining up with us. The solution to America’s woes lies not in trying fix or reform the welfare-warfare state. Instead, the solution requires an entire paradigm shift — one that rejects, fully and completely, both the welfare state and the warfare state.

A new paradigm is needed for our country — a libertarian paradigm, one that is based on the principles of economic liberty, free markets, voluntary charity, and a constitutionally limited republic. A way of life in which people are free to engage in economic enterprise without government interference or permission and to accumulate unlimited amounts of wealth and decide for themselves what to do with it. A way of life without coerced charity, without regulation of peaceful behavior (e.g., the drug war), and without a standing army and military industrial complex to bully, invade, and occupy foreign nations.

Libertarianism is the key to the restoration of a free, prosperous, peaceful, harmonious society to our land. Best of all, it’s based on moral principles, including the fundamental moral principle that holds that people should be free to live their lives any way they choose so long as their conduct is peaceful.

Only libertarianism provides the only way out of the socialist and imperialist morass the statists have foisted upon our land. In the meantime, sit back, watch the spectacle, and do your best to protect yourself and your assets from the statist onslaught.

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Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education.
He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at
LewRockwell.com and from
Full Context. Send him email.

Jacob G. Hornberger

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation.